Bytes Technology shares shot up on Monday as the group signalled that its full-year profit will be a fifth higher than in the prior year.
On Monday, the UK firm spun out of Altron in 2020 said its gross profit and adjusted operating profit for the full year will both be about 20% up on the prior year.
The company, which specialises in software, security and cloud services, also said its cash conversion returned to higher levels in the second half of the full year at about 85%, and with a cash balance of about £73m (R1.652bn).
On the news, the stock was up more than 7% in early trade on Monday. At 1.30pm, the share — up 9.7% over the past 12 months — was trading 6.52% firmer at R86.81.
Bytes is listed on the London Stock Exchange, with a secondary listing on the JSE, after a demerger that created R13bn in value for Altron shareholders in December 2020. The firm is now valued at R20.81bn.
“This reflects the very strong demand for software and IT services we continued to see from both corporate and public sector clients, despite the well-documented macroeconomic headwinds,” the group told investors in a trading update.
“With ongoing support from vendors, long-standing and strong relationships with our customers and the hard work of our loyal employees, we remain confident in our continuing ability to deliver double-digit growth.”
Bytes is the biggest reseller of tech giant Microsoft’s products in the UK and is chasing a market of 42,000 private sector companies, which collectively spent about £105bn on IT in 2019.
Neil Murphy, the company’s CEO said: “We are delighted with the performance delivered last year. Our successful strategy of acquiring new customers and then growing share of wallet, underpinned by strong vendor relationships and the commercial skills of our people, means we are well placed to capture the significant growth opportunities ahead of us.”
A full earnings report is expected from the company on May 23.
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